IGB directors reject Goldis offer, which RHB Investment deems 'not fair, not reasonable'

PETALING JAYA: Goldis Bhd's bid to take over IGB Corp Bhd has been deemed "not fair" and "not reasonable" by independent adviser RHB Investment Bank, resulting in IGB Corp chairman Tan Sri Abu Talib Othman and independent non-executive director Tan Kai Seng declaring their intention to reject the offer.
Major shareholder Goldis launched a conditional voluntary offer of RM2.88 a share for IGB Corp on July 18, 2014.
"After careful examination of the terms of the offer as contained in the offer document and taking into consideration the evaluation and recommendation by RHB Investment Bank, the non-interested directors have concurred with the recommendation of RHB Investment Bank that the offer is not fair and not reasonable and recommends that holders to reject the offer," it said.
Based on the unaudited consolidated financial statements of IGB as at June 30, 2014, the RM2.88 offer price represents a discount of 44 sen or 13.3% to its net asset per share of RM3.32.
In addition, based on the revaluation of the two properties Mid Valley Megamall and The Gardens Mall, RHB Investment Bank highlighted that the offer price represents a RM2.45 or 45.96% discount to the revaluation net asset value (RNAV) per share of RM5.33.
"Therefore, we're of the opinion that the offer price is not fair as it is not reflective of the fair value of IGB as indicated by the RNAV for each IGB share. Holders would be foregoing the opportunity to fully realise their investment at the RNAV by accepting the offer at RM2.88 for each IGB share," it added.
RHB Investment Bank also opined that by not accepting the offer, IGB shareholders would continue to participate in the growth of IGB Group and have the opportunity to fully realise their investment based on IGB's future prospect.
"We note that all divisions of IGB Group have shown improved performance, and we are of the opinion that the overall prospect of IGB Group is expected to remain positive given the ongoing and proposed projects of IGB Group in the domestic market as well as overseas," it noted.
Goldis holds a 31.11% stake in IGB Corp. The offer will remain open for acceptances until Oct 29.
IGB's share price closed 1 sen or 0.35% lower at RM2.86 yesterday.